This is what we found interesting from the current issue of the “The Economist” (August 11th – 17th August 2012).

The article titled “The Merkel Memorandum” on page 19-22 describes the euro’s “current plight.” It focuses on her conviction that the euro’s “survival is our self-interest.” Germany has contributed a lot of its resources towards this end but still “bluntly the plan is not working.” Some influential Germans are now recommending, “Plan B” even though they recognize that the plan has a huge cost.

While they are placing their faith in ‘Plan B’, they ought to consider that bailouts have short-term emotional outcomes. Preserving the euro may need taking many hard and unpleasant decisions. This is so because the global economy is floating on a debt of $800 trillion and debt owners have no stomach for any hardship. $3 trillion of the capital flows move around in the global economy every day because they have no boundaries. Their sole aim is instant gratification. In fact, many years ago Joseph Schumpeter warned that it would be the behaviour of this kind of micro economy that will decide the state of the world. He believed that the instruments in the hands of central bankers and economists would become obsolete and will not achieve an economy of equilibrium.

Einstein, another prophet of our century, advocated a global government and a global currency. If this does not happen “man will kill man”. The recognition of this will have to occur sooner or later. Today, it is not only the euro but also the entire global economy that is in serious trouble.

Any new plan to deal with this state of affairs must first attempt to change the education system. The focus of education must be to build human character. ‘The Economist’, through its Obituary column of Dr. Lakhmi Sahigal, in last weeks issue, presented us with one such woman of character and substance. Her high enlightenment, low expectations, integrity and frugality contributed much to the betterment of humanity. This example reiterates the need for new leaders, fresh ideas and people with a lot of courage. This is our most urgent need and could be the way forward.

Contentious politicians and economists are intellectually bankrupt and no longer relevant.